>RECOVERY OF INDIAN LIFE INSURANCE INDUSTRY (INDIA INFOLINE)

Indian Life Insurance industry, after reporting a decline for the last two months, staged a recovery in July'09. The industry's total Annual Premium Equivalent (APE) clocked a growth of 6.1% yoy on back of a strong 28.9% yoy growth by LIC. LIC continued to outperform the private players, since December'08 (posted growth of 37.9% points over and above the private players in July'09). Although private players reported a decline of 9% yoy, the fall was substantially lower than 24% yoy reported in the previous two months. IRDA is actively regulating ULIP norms, which dominate insurance sales for most players, to safeguard investors' interest. Recently, IRDA issued clarity on exclusion of mortality and morbidity charges for computiung the overall cap, which provided some relief to the players for controlling their ULIPs overheads. Further, the regulator is keen to increase ULIPs lock-in-period from three to five years, to ensure a higher return for investors.

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